Good day, everyone, and welcome to the Mack-Cali Realty Corporation Second Quarter 2014 Earnings Conference Call. Today’s call is being recorded. At this time, I would like to turn the call over to the President and Chief Executive Officer, Mr. Mitchell Hersh. Please go ahead, sir.

Thank you, operator. Good morning, everyone. Thank you for joining Mack-Cali second quarter 2014 earnings conference call. With me today is Tony Krug, CFO. And joining us from our Roseland subsidiary is Gabe Shiff, Roseland’s Executive Vice President of Finance. On a legal note, I must remind everyone that certain information discussed on this call may constitute forward-looking statements within the meaning of the Federal Securities law. Although we believe the estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved. We refer you to our press release and annual and quarterly reports filed with the SEC for risk factors that could impact the company. First, I’d like to review some of our results and activities for the first quarter and generally what we’re seeing in our markets. Then, Tony will review our financial results for the second quarter. FFO for the second quarter of 2014 was $0.50 per diluted share. During the quarter, we signed a total of 877,000 square feet of lease transactions including approximately 354,000 square feet of new leases. Our tenant retention rate for the quarter was 61.6% of outgoing space. And we ended the quarter at 83.7% lease, a 10 basis point increase from last quarter. Rent on renewals rolled down in the quarter by 6.3% on a cash basis compared to last quarter's 3.9% cash roll down. Remaining lease rollovers for 2014 are just 3.5% of base rent or approximately $17.5 million. Our leasing cost for the quarter were $3.21 per square foot per year, up slightly from last quarter's $3.08 per square foot per year, a very cyclical variable type number based on type of transaction. Despite the challenging office leasing environment, our portfolio continues to outperform in most of the markets…

Thanks Mitchell. Funds from operation for the second quarter 2014 was $0.50 per share as compared to $0.65 for the same quarter last year. For the second quarter 2014, net income available to common shareholders amounted to $0.58 per share as compared to net income of $0.26 per share for the same quarter last year. Same-store net operating income decreased by 10.4% on a GAAP basis and 8.8% on a cash basis for the second quarter. Our same-store portfolio at quarter end was 26.1 million square feet. Our unencumbered portfolio at quarter end totaled 215 properties and represents 74.8% of our portfolio on an NOI basis. At June 30, Mack-Cali's total un-depreciated book assets equaled $5.7 billion and our debt to un-depreciated assets ratio was 38.4%. The company had interest coverage of 2.8 times and fixed charge coverage of 2.4 times for the quarter. We ended the quarter with approximately $2.2 billion of debt with a weighted average interest rate of 5.51%. Currently we have $31 million outstanding on our $600 million unsecured revolving credit facility. Based on current plans and assumptions, we are updating our FFO guidance for 2014 to a range of $1.70 to $1.78 per share. At the midpoint, our guidance assumes occupancy remaining in the current area of 83.7% least through year-end. Same store net operating income is expected to decrease by approximately 4% over the remainder of the year. We have no else assets sales beyond the $84 million expected to close in the third quarter. We have no multifamily operating acquisitions assumed, and development spending between $70 million and $80 million the company equity is expected by year-end. Please note that under SEC Reg G concerning non-GAAP financial measures such as FFO, we are required to provide an explanation of why we believe such financial measures are relevant and reconcile them to net income. Available on our website at mack-cali.com are a supplemental package and earnings release which include the information required by Reg G, as well as our 10-Q. Mitchell?

Thank you, Tony. Now I'm going to turn the call over to Gabe Shiff, our Executive Vice President of Finance at Roseland. He will provide details around our progress throughout the portfolio in connection with our multifamily asset. Gabe?

Thank you, Mitch. Today 21 months since Mack-Cali's acquisition of Roseland, we are reflecting continued cash flow and value growth of our residential platform. Like previous quarters the second quarter represented progress along multiple growth areas. The continued build out of our asset construction program and developments of our controlled pipeline, the acquisition of strategic operating and land assets, and the pursuit of approvals for the repurposing of select Mack-Cali Holding. At quarter-end, we had approximately 2,400 apartment homes across eight communities in construction, representing approximately $895 million in total development activity. On average, this construction activity is projected to generate approximately $63 million of NOI producing an unleveraged yield exceeding 6.5%. The company has approximately $192 million of capital commitments to these active developments of which approximately $100 million has been investment to-date. From this construction activity, we are expecting initial deliveries of two communities in 2014 comprised of 317 apartment homes. They are RiverParc in Harrison, New Jersey, and Portside at Pier One on the East Boston Waterfront. Further, we anticipate delivery of three additional communities comprised of 884 apartment homes in early 2015. In addition to those near-term deliveries, in the second quarter, we continued our active lease up of RiverTrace at Port Imperial, Estuary in Weehawken, and the Chase at Overlook Ridge. These three communities were on average 56% leased at quarter-end as compared to approximately 20% leased one quarter ago, representing 381 apartment homes of new leasing activity in the second quarter. These chose absorption levels have been accomplished at Port Imperial and Overlook Ridge Master Plan communities where we are preparing our next round of construction starts. As detailed in Section 5 of the supplemental, a new section dedicated to the company's multifamily rental portfolio, our construction and development activity is comprised of three…

Thank you very much, Gabe. I think that was insightful and was a comprehensive review of our strategy and vision for what's happening over at Roseland and certainly for the remainder of 2014. And of course in addition to all of the activity at Roseland that Gabe just alluded to I want to reinforce the fact that Mack-Cali remains committed to being the preferred provider of office space in our market. We have a portfolio that's still close to 30 million square feet and through our creative repositioning we're working with our partners, our stakeholders, to identify and realize additional value opportunities in our office portfolio, either through adding a residential component to an office asset or creating mixed-use environment. As I indicated before, we are reinvesting significant capital into our office assets to enhance their efficiency and appeal in today's workplace. At the same time, we're successfully executing on our multi-family growth strategy. And so we continue to enhance value for our shareholders by creating exceptional mixed-use communities throughout the North East. And by the way we're doing all of this while maintaining comfortable financial flexibility. And so I'm pleased with the progress that we're making and the value that we're unlocking in both the office and multi-family sectors. And with that we'll now take your questions. Operator?

Yes, sir. Thank you, ladies and gentlemen. (Operator Instructions). And we will take our first question from Jamie Feldman with Bank of America-Merrill Lynch.

So I guess just starting out basically can you talk a little bit more about the roles that Brad Klatt and Carl Goldberg were playing in the firm and how that's going to get picked up going forward?

Carl, as I mentioned on the remarks, his principle responsibility is liaison with governmental entities in New Jersey. Particularly he has been very engaged in Weehawken in West New York, at Port Imperial, Morristown and other places with the local officials and he will continue in that role for at least a year from October, along with his daughter Debra who is currently a Roseland or Mack-Cali, Roseland employee working alongside of Carl. As you also know Jamie that I have had a long career in this business centered in the New Jersey marketplace and so Carl and I share many, many relationships in government, at state agencies, at the -- in the legislature and we've worked quite well together as a team since the combination of Roseland with Mack-Cali. So I frankly see a complete continuity and consistency with respect to what Carl has been doing. Carl's been extremely active in our repurposing. Again that's working as a liaison with governing bodies and the planners for the communities to properly explain of what we're trying to accomplish and then reduce that to ordnances where necessary for rezoning. With respect to Brad Klatt, Brad I guess has spent most of his time since the acquisition of Roseland mentoring the finance team including Gabe and Eric Roehnelt and others and it has, Gabe has taken on the principal role in the finance area, has expanded his role significantly in the banking relationship area right alongside Tony Krug, Jon DeBerry and Bill Fitzpatrick as it is the Mack-Cali Finance Group so that we are sharing all the relationships and we're taking advantage of the economies of scale, if you will, that we enjoy now as an even larger company in the financial market. So Gabe -- rather Brad has been terrific and, well we think that Gabe has clearly proven along with other members of his team that the mantle and the baton can now be passed to him. And again I want to point out that Marshall Tycher founded the company when he, from his Lincoln Property days he is the senior principal of the company and he is fully engaged, he works with the entire team, he and I work together on a day-to-day basis talking about opportunities and getting engaged early and things like Curtis Center so that we know comfortably what we think we can accomplish there and Marshall is not going anywhere. So we are pretty comfortable with what we are doing here we anticipate savings may be $4 million, $5 million a year and these transitions would shift course is important to the company and frankly something that our investors have asked us to take up a hard look at in reducing our G&A and so we are doing that.

And are you concerned all about; it looks like there is a change in your contract relating to the non-compete, can you give a sense of what their plans are going forward?

Carl's plan is to as I said devote his principal time to the ongoing efforts of what we're doing at Roseland. He does for the benefit of his daughter Debra has indicated to me that he would like to have this small consulting company where because of his role in state government in New Jersey formally as the Sports Authority Commissioner and so forth where he can be helpful as a consultant to venues that might want to come in for example and build a casino in Jersey City and have other aspects to that casino like entertainment and so forth where because of his long relationship with the government officials and the planning department he can do things like that. So I see no, first of all no conflicting issues with what Carl is going to do. And with respect to both Brad and Carl they I think are they characterize integrity and I don't think that they would do anything to compromise the success of what they all helped to create with Marshall Tycher and then subsequently with the team they developed there and now with Mack-Cali by doing anything that conflicts with us.

And think I guess a quick question for Tony. Can you just walk us through the changes to the guidance? And if I remember correctly I think you said, do you think your occupancy guidance down through year-end or did I get that wrong?

I had said that the occupancy would remain about where it is now. I don't know if you're referring to last quarter we thought we would have a little bit of an uptick but it wasn't that much of a different, and didn't have much of an impact. But the primary change to answer your question for the guidance was the fact that we didn't sell some assets that we were planning to sell this quarter we had thought we were going to sell last quarter because of the two assets in DC primarily. We will have a little bit of G&A savings that Mitchell spoke about that. Those are the primary drivers and obviously the -- we did little better in the second quarter. So the primary driver is the assets that we didn't sell some G&A savings.

And we will move to our next question, Michael Bilerman with Citi.

I think I will focus on the new disclosure which was helpful in terms of the multi-family the Schedule 5 and its going to reconcile a little bit with Gabe's comments. Gabe I think you talked about I think you talked about starting nine projects, the total capital commitment of about $630 million gross and you mentioned Mack-Cali of $120 million, I wasn't sure if that was equity or your total share of equity and debt and how does that $630 million compared to the $900 million of gross costs that are listed on page 52?

Sure happy to help clarify on that. So page 52 represents the projects that are currently in construction. From the beginning of the remarks I mentioned approximately 2400 units at about $895 million of cost those were the metrics referenced from Page 52. Page 53 includes our pipeline, which is almost all entirely all in control and if you could see almost entirely entitled as well. From that if you see the starts over the next four quarters, Q1 and Q2 there are nine projects there. But the costs that I referenced were with respect to those nine projects, the Mack-Cali Capital contribution are to those estimate which was expected in those nine projects.

Then the $120 million is just your equity into the project or is that your gross? So what would your gross share be of the $630 million because when I think about capital whether you're putting equity in or your share of the debt it's total leverage and so I just want to make sure that I understand what your capital commitment as of $630 million in gross terms?

Sure so the gross cost of $630 million are projected capital share of that and some of them will have equity partners will be $120 million approximately. That's approximately 50% ownership.

Right. So you will pick up $315 million of gross dollars so $200 million will be financed with debt, $120 million with equity, is that correct.

Yes, Michael we have contemplated 60% debt on all of these assets. So the total project could cost $600 million, 60% of that's debt.

Right and then you're ending plus a $100 million. So there is -- I mean with the current pipeline today, your share of that pipeline on Page 52 it's about $460 million gross which you spent about $116 million including your pickup of debt that's about $350 million less the fund plus the next round in terms of debt and equity is well over $300 million plus some of the repurposing plus I think, Mitch you talked about significant CapEx dollars go into your office assets. I guess when we start adding it up it is a big number in terms of just total capital in equity. How are you going to fund all that in addition to kind of keep the balance sheet at that levels and I think Gabe also talked about buying joint venture partners and simplifying the ownership and increasing an overlook, all that requires capital so I'm trying to get a better perspective of where the capital is coming from?

Yes, I guess the -- this is Tony, the $630 million that Gabe referenced is all assay, I don't know what's expected with it but projections. And clearly the funding will come from a number of sources. We will have some partnerships, joint venture contributions, we will have some debt. Mitchell had -- we have no definite asset sales but there could be some asset sales. And I think it's going to be a combination of those things. But again none of it is committed yet in full.

Yes, I think it's important to understand Michael that we have secured a tremendous amount of optionality at Roseland where we have the ability to proceed, have entitlements on 2000 apartments plus a queue behind that that in part consists of repurposing one particular one where we think we're just about to the approval stage from the town perspective. We don't -- if we don't feel comfortable with the availability of capital to the company, with our access to capital we will not proceed with the project. But it's our optionality to do so. We control the land and in the instances where we have partners presently on, only a handful of those assets we have the management control to determine whether we proceed or not. So naturally has been the history of this company we will not do anything stress the balance sheet. I maintained or I mentioned before balance sheet flexibility and that's important to the management team and it's very important to the board. So as we move forward with these opportunities we will determine more our access to capital is whether we need to bring in additional institutional partners, which is likely to help fund this queue. Part of the, what I would say almost the final stage of negotiations with one of our largest institutional partners is giving up the right but not the obligation to invest 35% of the capital in going forward projects, and I would say that at least 60% of this queue of nine projects are of great interest to them that they want to participate in with promoted structures to bring us to over 50% ownership based on hurdle rates. So there is a lot of flexibility that we're building into our capital plan in the company. I think I kind of answered.

Yeah, no, that's helpful. What I would say and a question just on Brad and Carl. In terms of your comment about savings $4 million to $5 million a year I think you said in G&A I just trying to better understand that I guess you are paying them out about $2.5 million in total. When I look at the proxy none of them show up in the comp table as highest paid executives, so.

Okay. They are not any Os of the company and so that's why they don't show up in the proxy; they are co-presidents of a subsidiary. But the $500,000 for each of them represented both their half of their bonus for the first year with the contract that was where they met their targets. The other half was based on a variety of different metrics in the company within the said targets. So they are entitled to the $500,000 but they won't going to get paid any of their bonus dollars until the expiration of the third year of their contract. So that's the $500,000. The 750,000 is their target bonus again half of what they could have achieved for year two, they could have each achieved a $1.5 million bonus for year two. They're getting half of it and that's the $1.250 million total for each of them.

And so embedded in G&A for currently the run rate for them on a quarterly basis, right, now is about $1 million a quarter. So that's how we should think about packing out once they leave?

Yeah, well first, the third year of their contract they were entitled to $2 million bonuses half target and half certain metrics plus their base salaries were $400,000 plus all the other expenses of load for an employee, medical and so forth. So that's the number, the $2.4 million potentially for year three plus the employee load that will be eliminated from G&A. Except Carl, just to be clear, is staying on as a consultant for that third year for $400,000 plus health insurance, plus some ancillary office support.

And next we move to Craig Mailman with KeyBanc Capital Markets.

Hi Mitch, it's Jordan Sadler.

Hey, Jordan

A question regarding I guess I'm struggling a little bit to understand the piece in terms of sources of capital as you were walking through with Michael. It sounds like there is not going to be additional acquisitions of operating multi-family properties. You are going to continue to be developer of the multi-family properties that you have in the pipeline here and some additional ones that may come into the fray, but there is no additional sales contemplated per se. And at the same time we talked about consolidating ownership interest and we talked about that a little on several calls and even on this call, and then I guess in the follow up to our answer at last question there were some discussion regarding brining in additional institutional capital and partners in these assets or in this pipeline. And so I guess I am just a little bit confused are we trying to consolidate ownership of the multi-family portfolio and development pipeline or we just trying to fund that again? I guess some confusion.

I am happy to kind of walk through it. First of all let's just talk about what our current obligations are. Our remaining obligation in 2014 to fund the Roseland development operation including not only Roseland but our URL project which actually is the largest component of the number and a few other things that are what I will call Mack-Cali projects. Some of the things we are doing with Keystone and so forth is $72 million. So that's what remains in 2014.

It's unfunded cash.

In 2015, unfunded cash which the majority of which is URL in Jersey City is $63 million. So those two numbers are $130 million, $135 million are obligations that we have to fund. That's not a very big number for a company that has virtually an untapped $600 million credit facility and has pretty healthy operating income. The $120 million in 2015 that Gabe alluded to, which would be our anticipated share for 50% ownership of nine new projects is optional.

Okay. And that's also the unfunded.

Some of them we can do all of them. And so we teed up this queue of opportunity, then we have another queue behind that that would have another potential $70 million of Mack-Cali equity. That's completely our option. One happen to a repurposing asset so we are going to want to do that, but that's under $15 million of Mack-Cali equity required. And we own the land obviously free and clear. So what we said about the restructuring and reformulating of our partnerships is that we have an institutional partner in Prudential, I will be very open about it, who we have a great relationship with and they would like to do a lot more with us, and they understand that we can no longer go forward with these legacy joint ventures where we are sitting behind a prep. So one project that we started a couple of months ago Marbella 2 in Jersey City was legacy partnership they allowed us as they sort of model for the new joint venture going forward to invest 25% of the equity, again not a big number because you are talking 60% debt financing on most of the stuff, on a pari passu basis with them. So now the team at Roseland which includes Gape, Andy Marshall who is a very senior level development but also finance professional. I have worked with Marshall and Ivan Baron to work through a litany of detail with crew and we are just about to the finish line where on a go forward basis they want to participate in as many projects as we can feed them; they have a lot of money that they want to put to use specially when you can develop 6 plus percent free and clear unleveraged yields in multi-family in the best locations in certainly in the northeast and they will give us the option of investing up to 35% of the equity in these projects and then getting a promoted return above that based on certain hurdle rates as well as paying the fees that cover the G&A in Roseland. So it's kind of a multiple pronged approach that we have taken here and I want to just emphasize to the investors and analysts listening to this call. We're very disciplined and we are pretty sophisticated and I have been sitting in this chair almost 18 years, and Tony has and others of the team but Tony has been kind of alongside me every step of the way. We're not going to get over our skies. We're not going to get ahead of our skies but we have all of this great opportunity set and we're going to work really hard as we have been to find mechanisms at least to look at and understand where we can do as many of these projects as possible to add value to our shareholders.

Okay. The other piece of that just to make it abundantly clear, so you get the $135 million of unfunded cash for the next two years or 18 months and then the optional addition of $120 million. What is the – so you are also assuming some incremental portion of debt and if we assume 60% leverage on this funding that would mean that the total capital deployed on the $135 million would be more like $300 million or $330 million or whatever.

Right, first of all, a lot of these structures are unconsolidated joint ventures and so that's number one. And that's a facts and circumstance analysis that the accountants do. So just whether rating agencies and others look through that that's a different issue.

Okay.

So you have unconsolidated debt and what we have seen take place at least with us is when we initially acquired Roseland and we were doing some construction financing, the construction lenders have traditionally looked for call it between up to 20% guarantees on what was non-recourse debt construction financing because Roseland was placing the guarantee of completion on the projects. As soon as we acquired the company told the banks, now the big boys are here in terms of financial capabilities and we're not providing 20% guarantees even though our subsidiary is guarantee and completion. And so we have seen that number throttle down by 50%. So when you think about $300 million of debt more or less you might see a 10% of that as a, what I would call, a "recourse" guarantee to the company only to complete construction. And remember now the financing is there because these are institutional partners for the equity at least in part and all we got to do is build the building and you're off the recourse. So I think that's kind of how you have to look at it, Jordan.

Okay.

Mitch, it's Craig Mailman here. Just wanted to touch on your comment about the TAMI kind of requirements kicking on Jersey City and maybe put a number on how much we're seeing and kind of what that could portend to your ability to back fill the mortgage down the face?

Right now I don't want to be mutually exclusive and so happens that we have a number of financial firms that we're actively engaged in discussions with. Clearly, the -- we're not seeing the mega deals like some of the deals done in downtown and couple of or the RBS yield down done at the Goldman's building but we have a reasonably good pipeline of activity that includes your traditional financial firm and but, of course, the Harborside 2 and 3 which is call it 400,000 sq ft plus or minus of vacancy because Morgan Stanley and Credit Suisse who offers us a phenomenal opportunity to transform that space and reimagine it to the hip, cool and edgy. And that fits in perfectly with our URL project which is at Harborside. So you have this. I know at this point it's a cliché to say live, work and play because everybody saying it but you really have a little city there. And with what we're doing at plazas 2 and 3 including, well let's just you know I want to be somewhat general more retail enhancement that look and feel of tech and coolness in terms of how we're designing the space, how it's been designed potentially a beer garden which we already have and we're going to enhance it similar to what we did in Philadelphia. We think that we can compete extremely well with the availability for that kind of space in downturn, particularly also the fact that New Jersey under its Economic Opportunity Act and its as of rate provisos and incentives for adding employees gives us great ability to compete for those TAMI tenants. And Jersey City by the way is just getting better all the time. I mean, it's got museums now and its church got issues like any others urban area, city area. But it is really becoming a very well amenitized community. So we have a reasonable cue. But I would tell you that TAMI tenants that we are seeing are smaller. They are not hug tenants. They are -- we have got one that is 35,000 feet that we are responding to, that is sort of the order of magnitude of what we are seeing.

And we'll move to our next question. We have Ross Nussbaum with UBS.

Hi. Thanks. Mitch, can you just qualify or clear up what the asset sales in the second half of the year are forecasted to be?

Yes. I talked about that before. We have three assets in Elmsford on Taxter Road, one building in Fair Lawn, New Jersey; two buildings in Tarrytown and one in Stamford Connecticut. They totaled 916,000 square feet, and I talked about the numbers before. Our total sales in 2014 will be approximately $346 million.

Okay. So another -- was it about another 100-ish together?

Well, we have a $104 million remaining on the assets I just identified.

Okay. And the timing of that, is that more Q4 than Q3?

It's like any -- within weeks.

Okay. All my other questions have been answered. Thank you.

Okay. Thanks Ross.

And we'll move to our next question. We have Steve Sakwa with ISI Group.

Thanks. Good morning Mitch.

Hi Steve.

Hi. I was just wondering if you could talk a little bit about our office leasing and may be the prospect for some of the large tenants in 2015 and '16? I know that's been a better source of problems, some large tenant move outs. And as you kind of look to the portfolio the next maybe 24 to 30 months, what have you identified as potential move outs and kind of prospects about back selling this?

Yes. Sure. With respect to '14 and the largest tenant is a tenant in Morris Plains, it's a 75,000 foot tenant, financial company. We simply could not accommodate, they needed more space believe it or not and need to restack. That building is being repurposed. We are in what I would call a thinning if not beyond with respect to the rezoning of that property, which will become close to 200 luxury multi-family apartment homes. And so, for 2014 that's the largest piece that we have. We have a couple of 25s and we actually have 140,000 footer in Roseland, 105 Eisenhower but everything else is somewhat smaller. So we -- again, not wanting to get out ahead of our skis seeing that there is still lackluster demand and frank, I'll be very candid with you just in general, Steve. What we are seeing a lot of our tenants that are coming to market two to two and a half years in events of lease expirations, some are tenants and some are not our tenants. And the brokerage community has kind of influenced them and convinced them that they should be looking early because of the specter that some of the better buildings and better space is not going to be available and that as a result potentially some absorption they might get a better deal today looking two, two and a half years out then they would get if they waited. So to some extent that's what we're seeing in the marketplace. And naturally, there are all kinds of complications with those deals, particularly if they are not our tenant because then they are looking for you to take over their rent somewhere else as part of the concession package. So that's part of the marketplace. And other than…

Okay. Thanks very much.

You're welcome.

And we will take our next question from Vincent Chao with Deutsche Bank. Vincent Chao – Deutsche Bank: Hey. Good morning everyone. I know you just gave a quite a bit of detail on specific leases, but just may be take me a step back on the occupancy and sort of the outlook change. It sounds like demand is relatively modest here. Is that -- is it more the demand side that fell off relative to prior ratifications or were there some additional move outs that you were notified about that that cause you to change that outlook?

No. I would say that there are no additional move outs whatsoever. We were anticipating, are hopeful that the -- we'd see some of the trajectory of the economic improvement that at least Washington or parts of Washington are talking about. Would start a better trajectory or velocity, I should say, of job growth which would result in some increase demand in the marketplace, even though lots of tenants today being under pressure to reduce their own occupancy and employment costs are densifying their installations. But in some ways we look at that as an opportunity for us because lots of us suburban assets sit on campus developments with ample parking. And so, tenants that are coming along that want to intensify their space to six or seven people per thousand square feet. Generally, we can accommodate them a lot better than a one off owner who's got four per thousand parking. We have the ability to use our parks. So I would say that we've obviously been disappointed in the fact that we haven't seen a good job growth trajectory. Even New York City is a lot of -- as you look at the deals you're seeing a lot of musical chairs, a lot of lateral movement to newer better buildings in some instances that could accommodate higher densities by restacking themselves so forth. So yes, it's been the demand side. We were more optimistic at the beginning of the year and that reflected in a 60 roughly 60 basis point reversion of what we had projected in January. Vincent Chao – Deutsche Bank: Okay. Thanks. That's really helpful. And just based on that I mean it's safe to assume that in the rents spread cutting the rents a little bit more wouldn't necessarily spur additional volume sound liking?

We meet the market. I mean, you can't, there is no way you cannot meet the market. We're aggressive -- we're putting as I said a lot of money into our assets for systems because obviously if the average tenant now is going to be 5 to 7 people per thousand you need the air-conditioning systems, the sanitary facilities, and the elevator systems to be able to accommodate that. We're in a financially flexible and liquid position where we can do that comfortably and really keep our assets at the top of their gain. With most of everything we sold off other than like a Wyndham which is obviously a fixed income play or a Sanofi-Aventis which is a fixed income play. What we've sold represents the -- what I would say the lower end of our portfolio. So we've maintained the highest end of our asset base, and we're putting money back into it to attract tenants. And we've kind of come out, I don't know if you've seen it, but we've come out with a, a new branding campaign to brokerage community in particular indicating, hey, we're a major, major player in the office business. We're here to stay and we can provide you the best quality of life with a most competitive occupancy cost and rents and brokers not withstanding some of the anecdotes I hear they love us, because we pay them a faithfully and fully and usually a lot of money upfront, not all the commission but a lot of -- part of it upfront. So we're in the game big time and we need to see the cooperation of the business environment help us along. And I would say also New Jersey for all the sort of negative press it gets for all the variety of issues they've been very, very helpful and aggressive down at tracking through the EDA and the Governor's Office and even the legislature through changing or trying to be helpful in amending things like Cowell, which is affordable housing fees to help New Jersey really regain its traction as a intellectual epicenter for the northeastern part of the United States. Vincent Chao – Deutsche Bank: Okay. Thanks a lot for that. And just one last clarifying question just on the 750 per at one point you may told severance those was going to be paid out rough sooner that is included in guidance right?

Yes.

And next we move to Tom McCalderwood with Cowen and Company.

Just a few small, cleanup items here. Looking at the JV performance this quarter looks like you got a strong performance from Crystal House. I was hoping you could tell a little bit about the update and the progress you're making there, kind of any impact may be seeing from the oversupply in these days?

We -- we had a -- I'm going to let Gabe comment a little bit on this, but we had a slow start there because of a variety of factors. We have a great partner who actually brought us into the deal a major capital provider. But we had a slow start on agreeing what the renovation plans would be, the upgrading of the units. Once we came to grips with that, what we found was and remember now Washington's painted with a very broad brush. Arlington, where we are is, I mean we're right on the Metro line, we're literally on a street that is extremely well-amenitized with lodging, hotels, restaurants. You can literally walk if you want to the airport. It's less than a 15-minute walk and, like I said, we're right on the Metro line. So we had to get -- coalesce with our partner to understand what the capital plan was. We did that months ago, and now our hit rate -- so then the next little issue that I would comment on is the software system that this particular leasing software system that this institutional partner generally uses. And what we found was that it wasn't real time enough dealing with the real on the ground metrics that we needed to address in order to have a higher lease up rates. And so now of course, every Sunday night I get a report as does all of the management at Roseland and one of our best performers now is Crystal House in the number of leases that are accomplished every single week. So we are a little slow out of the gate and we admit that and we're not -- we've slowed down building. We can build another couple -- 300 actually apartments on the…

Yes. If I may just follow-up on Mitch you just mentioned thinking about the traction in the marketplace and what we're seeing at Crystal House now that they were finally getting some behind us. For the numbers we report in the supplemental, represent the average occupancy over the quarter. Just want to share with you. The 360 occupancy number for Crystal House is 89.7% and the least percentage as a 630 was 93.1% and that's significantly higher than obviously what you have seeing in the supplemental. So we are trending, as Mitchell just mentioned, in the right direction at that asset.

Great. Thank you for that. Last item on the JV. There is just other line item that contributed about a penny this quarter. What does that consist of?

Yeah. We have a joint venture with the development entity that from time to time -- we get some -- I'll call it significant development fees. So that's primarily our share of those development fees from third party.

And we will take a follow-up from Michael Bilerman with Citi.

Yeah. Just on the Curtis asset acquisition, can you just talk about -- I think you provided 90 day financing in Keystone. How is that going to be repaid and can it be extended in sort of what was drivers of doing that?

It cannot be extended. We worked very carefully on a complex structure to create ground leases and so forth that would accommodate tax efficiencies out of the acquisition of that asset. And that's why that was done. It was not a liquidity issue by any means from Keystone's perspective. The loans, if you will, are secured by the asset and by the parent company, the fund, the original principals who created the Keystone Fund. They are not extendable and we are not at all concerned.

And so, they'll raise -- they'll just go out and raise equity Campbell to repay use repay use, is that the way?

They were prepared to fund their equity at the closing. So they don't need to raise equity per se. They have the capital to repay it. It was done for specific tax efficiencies.

And so, should we expect from a balance sheet perspective that will be repaid by 9:30 just from the capital from Mack-Cali perspective?

Yeah. Right. We will get that money repaid to us. And we will have like nothing drawn on our line.

All right. And then, can we just -- I just want to make sure that completely clear on the uses of capital, just to circle back on a lot of numbers that have gone out I think Gabe talked about this $135 million of unfunded. Which numbers is that totaling up from the South Bay? If I look on page 50, I see the company share budget is --

I am going to explain it to you exactly Michael.

Okay.

I mean, in the second half of 2014 we just acquired our partner's interest, it's called Rove, R-O-V-E, which is in Massachusetts. So what that for $17 million plus or minus -- what we are able to acquire is their half interest. We have a development project called The Chase, which is in lease up right now as we continue to build out the remainder of it. And they were an equal partner to us and now we bought out their interest. We still have a 50% partner in that, which is UBS. We bought Rove's interest in the Future Land, which can accommodate over a 1,000 apartments and actually it zone to accommodate two hotels as well, about 200 keys each. And also, a certain management fees that they had participated in with a Linor[ph] Project that we don't own, they didn't own but we manage and lease. It's adjacent to our (inaudible), its all part of our mixed use development in Malden, Revere; Massachusetts. So we thought that it made a lot of sense. They needed some liquidity, we brought them out and that's what that is. We have -- we are about to start a garage down in Weehawken, what we call the 1/3 Garage. It's an obligation that we have to the Port Imperial development and to the town to provide for this garage parking for the water ferry, New York Waterway. And so that's $8 million of equity. In Eastchester, I talked about the deal. I called it Tuckahoe, which is actually the municipal corporation that it sits in, that’s a $4 million second half commitment. In Marbella 2 I also mentioned that was a legacy partnership that we restructured with Prudential so that we could sit pari passu to their preps, that's $3 million.…

And what was the 135 that was referred?

Well, so -- well, that included $50 million. And in '15 you got a few to de minimis pieces of capital that fund some of the projects I just described. And the remaining funding obligation on URL Mack-Cali is $43 million in '15. So that totals '15, 43, plus some other small pieces $63 million. So it was '15 of 63 and '14 of 72.

And then, the stuff that’s now in this nice new section the multi-family rental portfolio Section 5. This has the capital commitments for the repositioning on page 50. It has the lease up communities on page 51 and the capital. And then on page 52 it has all the stuff that’s under development currently. I assume that there is going to be funding post '14 and '15 for these projects, is that fair to assume or will all of the capital that you just talked (inaudible) extended?

Yeah. All the capital will be extended. These are immediate repositionings, so I don't expect that. The only difference to what you're looking at is that we have one project, which is a repositioning project, a repurposing project. It's currently -- and I talked about it on the call. 75,000 foot building that we are going to demolish and we are like 99% along the way with a town in them writing the ordinance of rezoning. And we are going to build 188 market units and then a few not market units of luxury apartments. And it's a $70 million project, which we can take a partner in, we don't have to take a partner in. And we can build it at our leisure, although it's in a great location. So we'll probably want to build it. That's the only number that's not in the table you just referenced.

And that's helpful. And then, I just want your view on how you look at corporate leverage because you talked about it a lot of these projects being unconsolidated joint ventures. Do you look at on a see-through basis in terms of -- because arguably your findings in these projects is 60%, lowers your equity commitment for the projects but arguably increases the total into price leverage for the company. So I'm just curious how you think about when you look at the balance sheet and your leverage? Do you look at on a fully see-through basis or you're just thinking about it from a consolidated basis?

The answer to that, Michael, is that we look at it sort of as the composite. We are investment grade rated. Obviously, the leverage limitations and covenants exist. We are about 55% on a debt-to-market cap for whatever that means, but there are all kinds of tests. We are on a debt-to-book basis with 39%. Our coverage ratios are very strong. So we look at it all. I am not trying to avoid your question or being vague, but we look at it at all. And when you're going to finance that -- if you're going to finance an asset, especially in the most favored sector of the real estate community, which I believe is multi-family you don't wan to under leverage it either. You want to take advantage of efficient low cost leverage that exists in today's market. So I know it's a little bit of a blurred line in the response but that's what we look at.

And last one. And I apologize if I missed that. On page 17 in the debt, you talked about the Wells Fargo CNBS. You've begun discussions to extend the maturity or modify the loans. What is the -- I guess it's that $80 million of debt, what's the capital (inaudible)?

Yeah. We are -- look, we have been trying to engage the mortgagee, servicers couple of them have been assigned to special servicers. These are non-recourse assets. They are all grouped in one sort of neighborhood in Roseland., New Jersey and the Becker Farm area. And sometimes, Michael, there are complete disalignments of interest between the constituents. We have potential opportunities to restructure some of these leases that exist in these assets on a long-term basis and didn't create long-term value. The mortgagees look at short-term maturities at pretty high numbers per square foot. The special services are getting fees to continue to monitor these bond pools that they have. So what I would say to you is that we are trying to engage them to everybody's mutual benefit. I don't know how we'll end up here. And that's --

And so, this is a $160 million of total debt in the -- this is all the Wells Fargo CNBS?

Yeah. It's primarily. Yeah, whatever the number is $96 million. But that's all Wells Fargo.

Okay. All right. Thank you.

Okay. You're welcome.

And next we move to John Bajani with Green Street Advisors.

Most of my questions have been asked. But I just had one quick one on the New Jersey tax incentive plan.

Yes.

So anecdotally I have been seeing a few deal sharing there, where tenants are moving to State/New Jersey City, gets $30 bugs the year of tax incentives.

Yes.

I get that that's probably at the highest end. But looking at the deal you guys did in Paramus a couple days ago, it looks like the retention tax incentive plan was about 250 a foot a year, is that -- would you say that 250 a foot a year is reflective of what tenants get for staying in Jersey or is that a bit on the low side or what's the right way to think about that?

Well, I-- first of all, we were not involved in any way in the process that United Water undertook with EDA. So I couldn't even comment to you accurately in any way as to what their discussions were, how they evaluated the metrics of jobs retained. And I guess they principally retained out of their current headquarters on the reservoir in Northern Bergen County. So it's very difficult for me to respond to that question. What I can tell you is that, for sure the -- for example, we have marathon data in Neptune, New Jersey who has got a rather significant -- I don't have the numbers on my fingertips but I think if we look back on the press release for Marathon at 3600 Route 66 in Neptune you will see they got a much more significant benefit from EDA and they were a New Jersey company relocating with slight job expansion. So I just don't want to give you a miss -- or information that is not accurate on United Water on that program. As -- I think you can generalize it. Say that new jobs in a target area and the cities, the urban areas are clearly target areas like Jersey City, could result in a $100,000 of job over ten year period.

Okay. Thanks. That's helpful.

You're welcome.

And ladies and gentlemen, that does conclude today's question and answer session. I would like to turn the conference back over to our speakers for any closing remarks.

Well, thank you all for joining us on today's call. I hope that we were able to clarify any questions that you had. And I think it was a very full and comprehensive call. And we will look forward to reporting to you again next quarter. Hope you all have a good day. Thank you.

And that concludes today's conference. We do thank you for your participation. You may now disconnect. Have a great rest of your day.